How The Cult of Oatly Nearly Brought Down the Company

What too much of a good thing really looks like

Is it possible to drown in success? Can you do so well that the very demand that kept you in business strangles you?
The answer is yes, and much like drowning in chocolate, it’s not as fun as you’d imagine.

In 2016, Swedish oat milk company Oatly exploded into the US market and consumers went wild. Initially only providing their product to cafes, over-excited consumers started buying bottles directly from their baristas in secret under-the-table deals.
After Oatly started noticing the enormous appeal of their product in the States, they started shipping product from their European factory to US supermarkets to meet demand.
But they couldn’t ship them fast enough, and stores couldn’t keep them on the shelves for more than a few hours.

Photo by Brian Suman on Unsplash

Slow and Steady

Oatly’s original strategy was to test the US market by introducing oat milk to customers slowly through their local, trusted barista.
They hoped that eventually demand would increase and they’d begin introducing the product into a few supermarkets, growing gradually.

But while introducing the product slowly was a tactical decision, it was accidentally an incredible marketing decision. Because it turns out that giving Americans limited access to a product through coffee shops doesn’t convert to rational consuming; it turns into rabid FOMO fever.
Everyone’s got to have a taste of the limited supply product, and word travels extremely fast.

This feverish desire for the limited supply product snowballed into a shortage that nearly wrecked the reputation of the brand. In 2018 there was an infamous shortage of the barista edition of Oatly’s milk, and this shortage tore strips off the good-will they had been banking since the 2012 takeover of the new CEO.

The dramatic shortage of product was due to an unbelievable and unexpected sudden rise in oat milk sales…